WTI Price Forecast: Drops to over one-week low, below $94.00 but bullish bias stays intact
- WTI remains depressed amid easing concerns over supply disruptions from Saudi Arabia.
- The geopolitical risk premium remains in play, which should limit losses for the commodity.
- The bullish technical setup backs the case for the emergence of dip-buying at lower levels.
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – turns lower for the fourth straight day following a modest gap-up open to the $96.55-$96.60 region and drops to an over one-week low during the Asian session on Monday. The black liquid currently trades just below the $94.00 mark, down nearly 1.50% for the day.
Saudi Arabia said that it expects the East-West pipeline to return to about half its capacity within days after it was shut down following a drone attack. Adding to this, a recovery in shipments from Saudi Arabia eases supply concerns and turns out to be a key factor exerting pressure on crude oil prices. However, intensifying fighting between the Iran-backed Houthi group in Yemen and Saudi Arabia keeps the geopolitical risk premium in play, which should help limit the downside for the commodity.
Even from a technical perspective, crude oil prices hold a constructive bullish bias above the 100-day Simple Moving Average (SMA) at $85.14. Moreover, the 38.2% Fibonacci retracement level of the August-September upswing, near $91.13, underpins the recent advance. Meanwhile, the Relative Strength Index around 56.0 suggests moderate positive momentum even as the Moving Average Convergence Divergence (MACD) has slipped marginally negative, hinting at a maturing but still supported uptrend.
On the downside, initial support is seen at the 38.2% Fibo. retracement at $91.13, followed by the 50.0% level near $87.80 and the 61.8% retracement at $84.47, with the 100-day SMA around $85.14 reinforcing this broader demand zone on pullbacks. On the topside, immediate resistance emerges at the 23.6% retracement around $95.25. A sustained break above this barrier would be seen as a fresh trigger for bulls and open the way for a move towards retesting the recent swing high at $101.91.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
WTI daily chart
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
